Look and Learn

THE FIRST administrative assistant I had as a broker was a bit unusual. While his chosen vocation was direct mail, his avocation was palm reading. Orders to be placed, reconciliations to be made — but there he would be, crooning the future into a bemused client's ear by describing his lifeline.

This guy was a disaster waiting to happen, as you can imagine, and when the lists started coming in late the complaints started coming in fast.

I called my assistant into my office.

“Aren't you interested in learning something about the business,” I whined, “finding out what a list is all about?” He toyed with a tarot card.

“I know what a list is all about,” he replied. “It's about hotlines.”

I would have strangled him then, but my palms were sweating.

Hotline orders do account for over 80% of all orders in the list rental community, but a list is not a hotline waiting to be ordered. The hotline is a marketing tool — certainly the most valuable marketing tool when one considers the best segment to order — but a tool nonetheless. It simply defines the periods of update and the dimensions of the new customers coming onto the file. But like other selects — gender, unit of sale, etc. — these are only selects. They are not definitions of the list.

A basic reading of the text on the data card will give the broker or mailer an introductory understanding of the list, such as the general nature of the magazine subscribed to or the merchandise purchased. In practice, it will help make the initial decision regarding whether to consider testing the file. But only a more comprehensive understanding of what a list is about will make up the potential renter's mind.

In my experience, this comprehensive understanding is absent from the business sensibility of potential renters to an alarming degree. Brokers are the busiest of people. Between keeping the paperwork, reading the incoming data cards, doing the recos, putting out the political fires, keeping the client happy, supervising the assistants, keeping the boss happy, negotiating the minimum guarantees, questioning list managers about balance counts and occasionally having a discussion about the Mets' chances of winning the pennant this year, brokers have precious little time to sit down and give very serious consideration to the lists they are recommending.

And why should they bother? Isn't it enough that the list can be tested without this understanding? There's a practical reason for understanding a list, and it has to do with the way a list changes over time, just as the list owner's company changes its product mix, method of approaching its customer and pricing. To understand a list is to both comprehend and anticipate changes in the company and its file. That protects the mailer, indirectly the broker and certainly the pattern of rental on the list.

A mailing list is a constantly changing entity. Every day, customers are added, while expires or timeworn buyers are taken away. At the same time, the marketing strategies utilized by the company change the overall shape of the file, forcing the renter to continually rethink the nature of his utilization of the list. An increased unit of sale, a different product mix and the use of different marketing vehicles can change the file's chemistry and shape.

For example:

• You've tested List X — it's worked! And over the next six months it continues to work. Then results start to drop — not radically, but enough to cause the broker and mailer to become concerned.

  A check with the manager or list owner reveals that Company X has radically increased its use of package inserts to gain customers. It could mean that the impulse factor driving the buyer has quickened, and since the mailer's offer is a low-impulse-driven one, that should be a focus of attention.

  The solution is to attempt to induce the list owner to omit the package insert response customers, which will drive the universe down but undoubtedly bring the response up.

• The three-month hotline of apparel company List Y has been working for a mailer for years. Originally the list was broken down as being 85% female, but now Company Y, unbeknownst to the mailer, has greatly expanded its male shirt line and the results are slowly and almost unnoticeably beginning to appear on the data card on the gender percentage line.

  But the broker is hip. She's kept in touch with Company Y's catalog, and she sees the change. She is able to inform the mailer in plenty of time to avoid a problem, and a gender select is added to the order. The broker is a hero, her boss gives her a raise, and she's carried around the office on the shoulders of her grateful administrative assistants.

• List ZZZZZ is a snoozer. You're a broker who has been renting it on behalf of your client/mailer for five years, and you're sailing along with a very nice, high-quantity three-month hotline.

Now comes a report that Company ZZZZZ has laid off four people in the marketing department. You have two options when you receive this news. You can continue to rent the list as you have before…or you can ponder the meaning of it all.

Have these people been fired because the marketing vice president is simply a louse, or is it because Company ZZZZZ has been having some financial problems? If the latter is the case, your wonderful quarterly hotline quantity might very well be going in the direction of Enron. You call for ZZZZZ's latest financial report; you discuss these possibilities with your client; and you look at your list rental mix to see if you can increase your rentals on another list on a regular basis. You may look in a mirror and congratulate yourself: You're a smart person.

Find the Clues

To understand a list is to really see the affinity between the list, the list owner's company and the mailer's production campaign strategy. You've got to appreciate both the condition of the company and the nature of the products being sold. It's not enough to know that the list's customers bought a particular product. What was the offer that induced them to respond? Was a premium involved? Is the company an established, trusted organization? A fly-by-night? (That's not necessarily bad, by the way. This kind of company tends to be somewhat more imaginative and entrepreneurial.) Is the hotline count to be trusted?

There are dozens of questions like this, although not all of them have to be answered.

One of the clues to understanding that the list owner's company has changed its product mix and approach to its customers is to be alert to segment offers that are added or deleted from data cards. A new “select by product” segment might very well indicate the company has added new products to its customer offers, and the manager feels the quantity per product is high enough to generate rental even though segmentation takes place.

At that point, a phone call to the manager is appropriate; why has this new segment been added? The answer is very often a window onto the company's operations.

Every mailer forms a general picture of his targeted market — young or old, wealthy or poor, athletic or couch potato, opportunity seeker or conservative citizen. Income, age, lifestyle. Almost always, this picture is flawed. Yet it is extremely important for the mailer, or the mailer's broker, to see the prime prospect as the marketing director of a list owner's company sees him.

When I was a broker, when one of my clients was using a particular list very heavily, I almost always sought the chance to speak to marketing people at the list owner itself rather than speaking through the manager. The reason was not because I wanted to bypass the manager when placing orders. I simply wanted to perceive the company's target market as it saw it. Like chicken soup, asking the manager for a conference call to ask these questions never hurt, although it only occasionally helped. But when it did help, it was of enormous help.

I also welcomed minimum-guarantee meetings with the manager and list owner, because it afforded me the opportunity to ask these questions directly of the list owner. Minimum-guarantee meetings are always perceived to be about minimum guarantees, of course. But they can also provide a terrific opportunity to meet the guy who put the list together.

Perhaps the greatest reason for brokers to gain comprehensive knowledge of the lists mailers are renting is to show mailers and clients that they're one step ahead of them.

No broker ever lost any clients by giving them information they previously did not possess. No broker ever lost any clients by alerting them to possibilities, even the negative possibilities, that might have developed in the recent past.

But I'm willing to bet that few brokers have retained many clients for very long by accepting the possibility that the patterns of the past are certain to be repeated in the future.